SEC nominee reveals possible conflicts with Wall Street
Published 9:34 am Friday, March 10, 2017
WASHINGTON — The Wall Street attorney chosen by President Donald Trump to head the Securities and Exchange Commission has worked on many of the kinds of deals the agency regulates and represented some of the world’s biggest financial firms.
A financial disclosure report that Jay Clayton filed with the government reveals clients that pose potential conflicts of interest for the SEC job. They include financial industry powerhouses Goldman Sachs, Deutsche Bank, Barclays and UBS. He may have to recuse himself from some cases that come before the agency.
Trump nominated Clayton, a partner in the prominent law firm Sullivan & Cromwell, as chairman of the independent agency that oversees Wall Street and the financial markets.
If confirmed by the Senate, his responsibilities will include enforcing SEC rules written under the 2010 law that reshaped financial regulation after the 2008-09 financial crisis and Great Recession. Clayton also will participate in decisions on enforcement actions that SEC attorneys bring against financial firms and corporations.
Clayton has vast legal experience in corporate mergers and public stock launches, as well as with representing big financial firms and other corporations.
Some of his biggest cases came in the panicky days of 2008: Clayton represented Goldman in billionaire Warren Buffett’s $5 billion investment in the bank, and the teetering Bear Stearns in its rescue sale to JPMorgan Chase. He worked on many deals bringing companies public, notably the 2014 U.S. stock market debut of Chinese e-commerce giant Alibaba — the biggest IPO ever.
Clayton’s disclosure filing shows other big corporate clients including Ally Financial, Royal Bank of Canada, Volkswagen, British Airways, Priceline Group and Valeant Pharmaceuticals. Valeant, a Canadian drugmaker, is the target of at least 10 government investigations, including a congressional probe into high drug prices.
Two of the biggest hedge funds — activist investor Bill Ackman’s Pershing Square and Paul Tudor Jones’s Tudor Investment Corp. — are among Clayton’s clients.
Two additional corporate clients weren’t disclosed because they’re the subject of “non-public” investigations, according to Clayton’s form.
“This is a sort of Who’s Who of Wall Street,” said Marcus Stanley, policy director for Americans for Financial Reform, a coalition of consumer, civil rights and labor groups. “I would think that this would force quite a lot of recusals” by Clayton.
Clayton is among a number of Trump choices for top government positions with Wall Street connections. Treasury Secretary Steven Mnuchin is a former Goldman executive, leading economic adviser Gary Cohn was until recently Goldman’s president, and billionaire investor Wilbur Ross heads the Commerce Department.